Walmart Inc WMT shares are tanking on Tuesday after the company slashed its guidance as a result of high inventory levels and continued inflation pressures.
Several retail stocks were dragged down with Walmart, as the market anticipated a sector-wide problem, but Jim Cramer suggests that the issues may be tied to poor management.
What To Know: "Inventory management is both the bane of existence and I'd say the high point of good managers ... I don't know if they've lost control of the situation," Cramer said Tuesday on CNBC's "Squawk On The Street."
Everyone seems to be assuming that the issues are widespread across retail, but Cramer believes Walmart may just be executing poorly.
"It makes me wonder," Cramer said. "Do they have control over what is really going on?"
He told CNBC that he doesn't expect to hear the same things from other retailers with stellar management, like Costco Wholesale Corp COST and Target Corp TGT.
"When Costco reports, you're gonna see that Rich Galanti, the CFO, does not allow this, and I use that verb very, very rarely. He will not allow this to happen," Cramer stressed.
He argued that Walmart should have had enough of a read on its business to better manage inventory.
"You can look at whether things are selling. You can do it," Cramer said. "They have every sort of technology to tell them. I mean, when my dad worked at Gimbels, I feel like he knew more about trousers and gabardines than these guys know about apparel, and that was in the '50s. This is not forgivable. It's not forgivable!"
Cramer noted that people are going to say that the issues are "across the board" in retail, but he said that's not the case.
"There are plenty of places that are doing OK, that have figured it out. You clear inventory ahead. You make a judgment ahead," he emphasized.
Amazon.com Inc AMZN is another stock that was dragged down with Walmart, but Cramer is more optimistic than the market seems to be.
He highlighted the company's strong third-party sales and noted that he expects Amazon Web Services to carry the e-commerce giant through the quarter. Amazon is set to report earnings after the market closes on Thursday, according to data from Benzinga Pro.
All in all, Cramer holds Walmart to a higher standard than the average retailer, he said. With the stock down about 8%, he suggested that it could go even lower.
"Maybe someone is going to make a concerted case that this is your chance. I'm not making that case," Cramer said.
WMT Price Action: Walmart has a 52-week high of $160.77 and a 52-week low of $117.27.
The stock was down 7.98% at $121.51 at time of publication.
Photo: courtesy of Walmart.
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